FinTech Innovation: From Robo-Advisors to Goal Based Investing and Gamification

224 Pages·2016·2.98 MB·English

by  Paolo Sironi

CONTENTS
Cover
Series Page
Title Page
Copyright
Dedication
Preface
Organization of the Book
Acknowledgments
About the Author
Part One: Personalize Personal Finance
Chapter 1: The Theory of Innovation: From Robo-Advisors to Goal
Based Investing and Gamification
1.1 Introduction
1.2 A Vibrant FinTech Ecosystem
1.3 Some Definitions, Ladies and Gentlemen
1.4 Personalization is King
1.5 The Theory of Innovation
1.6 My Robo-Advisor is an iPod
1.7 What Incumbents should Consider when Thinking about
FinTech Innovation
1.8 Conclusions
Part Two: Automated Long-Term Investing Means Robo-Technology
Chapter 2: Robo-Advisors: Neither Robots Nor Advisors
2.1 Introduction
2.2 What is a Robo-Advisor?
2.3 Automated Digital Businesses for Underserved Markets
2.4 Passive Investment Management with ETFs
2.5 Algorithms of Automated Portfolio Rebalancing
2.6 Personalized Decision-Making, Individual Goals, and
Behaviour
2.7 Single Minded Businesses
2.8 Principles of Tax-Loss Harvesting
2.9 Conclusions
Chapter 3: The Transformation of the Supply-Side
3.1 Introduction
3.2 The Investment Management Supply-Demand Chain
3.3 How Intermediaries make Money
3.4 Issuers of Direct Claims (Debt Owners)
3.5 The Institutionalization of the Private Banking Relationship
3.6 The Digital Financial Advisor
3.7 Asset Management is being Disintermediated
3.8 ETF Providers and the Pyrrhic Victory
3.9 Vertically Integrated Solutions Challenge Traditional
Platforms
3.10 Conclusions
Chapter 4: Social and Technology Mega Trends Shape a New
Family of Taxable Investors
4.1 Introduction
4.2 Generational Shift (X, Y, Z, and HENRYs)
4.3 About Transparency, Simplicity, and Trust
4.4 The Cognitive ERA
4.5 Conclusions
Chapter 5: The Industry's Dilemma and the Future of Digital
Advice
5.1 Introduction
5.2 Wealth Management Firms: Go Digital or Die
5.3 Asset Management Firms: Less Passive, More Active
5.4 Robo-Platforms: Less Transactions, More Portfolios
5.5 Digital-Advisors: Empowered Customization
5.6 Robo-Advisors: Be Human, be Virtual, take care of
Retirement
5.7 Conclusions: Clients take Centre Stage, at Last
Part Three: Goal Based Investing is the Spirit of the Industry
Chapter 6: The Principles of Goal Based Investing: Personalize
the Investment Experience
6.1 Introduction
6.2 Foundations of Goal Based Investing
6.3 About Personal Needs, Goals, and Risks
6.4 Goal Based Investing Process
6.5 What Changes in Portfolio Modelling
6.6 Personal Values
6.7 Goal Elicitation
6.8 Goal Priority
6.9 Time Horizons
6.10 Risk Tolerance
6.11 Reporting Goal-Centric Performance
6.12 Conclusions
Chapter 7: The Investment Journey: From Model Asset Allocations
to Goal Based Operational Portfolios
7.1 Introduction
7.2 Main Traits of Modern Portfolio Theory
7.3 Main Traits of Black-Litterman
7.4 Mean-Variance and Mental Accounts
7.5 Main Traits of Probabilistic Scenario Optimization
Chapter 8: Goal Based Investing and Gamification
8.1 Introduction
8.2 Principles of Gamification
8.3 Gamification of Wealth Management
8.4 The Mechanics of Games
8.5 Conclusions
Concluding Remarks
Bibliography
Index
End User License Agreement
List of Tables
Table 2.1
Table 2.2
Table 2.3
Table 2.4
Table 2.5
Table 3.1
Table 6.1
Table 6.2
Table 6.3
Table 7.1
Table 8.1
List of Illustrations
Figure 1.1
Figure 1.2
Figure 1.3
Figure 2.1
Figure 2.2
Figure 2.3
Figure 3.1
Figure 3.2
Figure 3.3
Figure 3.4
Figure 3.5
Figure 3.6
Figure 3.7
Figure 3.8
Figure 4.1
Figure 4.2
Figure 4.3
Figure 5.1
Figure 5.2
Figure 5.3
Figure 6.1
Figure 6.2
Figure 6.3
Figure 6.4
Figure 6.5
Figure 6.6
Figure 6.7
Figure 6.8
Figure 6.9
Figure 6.10
Figure 6.11
Figure 7.1
Figure 7.2
Figure 7.3
Figure 7.4
Figure 7.5
Figure 7.6
Figure 7.7
Figure 7.8
Figure 7.9
Figure 7.10
Figure 7.11
Figure 7.12
Figure 8.1
“The wealth management industry is being redefined as we speak.
While robo-advice will drastically change how financial institutions
serve mass-affluent clients, goals-based wealth management is
becoming the golden standard for high-net-worth firms. Paolo
Sironi's book provides a holistic and comprehensive look at these
complex industry changes.”
–Alois Pirker, Research Director, Aite Group
“FinTech Innovation is a FinTech survival guide for anybody who
manages, invests or saves money. Disruption in Asset Management
is coming fast and this book highlights how to benefit from innovation
such as Robo-Advisory and Goal Based Investing. This is a must-
read book by Paolo Sironi, a global FinTech Thought Leader!”
–Susanne Chishti, CEO, FINTECH Circle; Chairman, FINTECH Circle Innovate; Co-
Editor, The FINTECH Book
“This is a thoughtful and superbly executed look at how financial
technology has brought welcome changes to the world of investment
management. This is essential reading not only for next generation
investors but all investors who want to fully understand how money -
their money -will be managed going forward.”
–Mark Landis, Founding Partner, Wavelength Capital Management LLC
“Paolo Sironi succinctly captures FinTech's role in the escalating
disintermediation of the Wealth Management industry, while offering
a logical rationale for what may lie directly ahead. The convergence
of investment advice and planning via potential real-life simulations
will create a new path for Global Wealth Managers. Goal Based
Investing may very well offer regulatory and revenue solutions for a
rapidly changing industry.”
–Mark Cipollina, Executive Director, Head of Investment Advisory UK, Standard
Chartered Bank
“This book presents a bold new vision on Fintech and Goal Based
Investing! Just in time for the largest wealth transfer in history. Goal
Based Investing and FinTech solutions are in the minds of every
millennial and baby boomer who is millennially-minded.”
–April Rudin, CEO/Founder, The Rudin Group
“It's simple. If you want to know what the future holds for wealth
management, ask Paolo Sironi. His latest book presents a personal
vision of financial advice that all market participants must heed to
stay relevant, and ultimately to stay in business.”
–Aki Ranin, FinTech blogger and Entrepreneur
“This book presents a masterly account of the shifts in the
digitalization of financial services and wealth management seen from
the perspective of a bank, advisor and investor.”
–Anthony Christodoulou, Founder, Wealthtrack –Robo-Investing Europe
“Paolo Sironi takes us beyond the hype to remind us that FinTech
Innovation is about customer outcomes. This book provides insights
on how quantitative finance and digital technologies can be
combined to change the way the wealth management industry can
help consumers achieve their goals.”
–Stephen Huppert, Partner, Deloitte Consulting
“Paolo Sironi's book courageously addresses a transformation that is
just starting to happen. Before the dust settles, he captures the
essence of the shift from plain vanilla auto-investing to the next
generation. He offers a qualitative and quantitative framework that
can address the issue holistically: Goal Based Investing with
Gamification elements. A strategic solution that Sironi examines from
both sides of the spectrum: the financial services provider and the
end-user point of view.”
–Efi Pylarinou, Founding Partner, Daily Fintech
FinTech Innovation
From Robo-Advisors to Goal Based Investing
and Gamification
Paolo Sironi